For Building Loyalty Programs, Adored Emphasizes Privacy — And Beacons

Rewards and loyalty app platform Adored believes that shops and businesses who want to connect with regular customers don’t need to store their personal information in their marketing systems to make the right connection.

The idea being pushed by Cory von Wallenstein, Adored’s CEO and co-founder, is that people — managers, staff — should be the only ones who “know your name” when entering their place of business. A computer system just needs to be able to recognize a familiar signal associated with a patron.

The path the New Hampshire tech company has taken to deliver its hospitality and brand clients’ rewards offers in an anonymous way is through beacons.

Cory von Wallenstein, CEO of Adored

“When you’re at a ski resort, it becomes your real-time engagement channel for what’s happening at that resort,” said Wallenstein. “What events are happening on the mountain, what band is playing in the bar, what specials are happening that evening. Why you should come back. It’s just an entire experience enhancement to your ski experience. If you’re in a restaurant or a cafe it’s what reasons you have to come back to that location, it could be a loyalty rewards, it could be a daily specials of what’s happening, it could be a new menu item.”

Adored has been using proximity platform Estimote’s beacons for the past few months on behalf of its New England clients such as Manchester, NH coffeehouse Cafe la Reine.

The cafe has used Adored since last year and credits the rewards program with helping boost average visits per customer per week from 2.1 to 2.5 — a 20 percent improvement.

We checked in with Wallenstein about the ways beacons and privacy added to the appeal of its rewards programs following the raising of a $2.3 million seed round to help build out its own technology.

Geomarketing: How do Estimote and beacons support the Adored platform?

Corey von Wallenstein: The beacon technology is really the foundation of everything we’re doing, the venture came about because the technology is so powerful, but people have not solved the app engagement and distribution problems and they have not installed the privacy concerns for consumers.

The entire Adored thesis is that the product needs to work everywhere. But rather than having users install an app, [a beacon is] only used for a single location. That’s been a key foundation of it. Because the data is so powerful we have to respect that consumer privacy line. By keeping everything anonymous we’re able to respect that line. Estimote in particular was the easiest platform to get up and running and be able to scale very quickly.

Aside from being based at a single indoor location, why are beacons so important to Adored’s platform and services?

It’s very important to us that we be able to deliver an offline experience, so our platform needs to work even if there’s no cell connectivity. [Since they’re powered by Bluetooth signals nearby], beacons can deliver this great experience without needing their cloud to be accessible over the internet, everything can be done locally over the phone.

Do you think the beacons help with maintaining that anonymity while still allowing Adored’s clients to connect with people more fully?

Absolutely, it’s the foundation. That value is key to unlocking the potential of beacons, when people first started with beacons they used to think of geomarketing as a topic, it always was the marketer first.

It was always like “wow, just think of how powerful this is, just think of what we can do to market, market, market.”

Everything that the beacon technology can do is being put in place for the benefit of the consumer. Whether that’s automatic loyalty rewards without them having to do anything, or it’s tailoring the content that you see in the app as the content you want right, it’s the events that are happening in the resort that you don’t want to miss out on.

How do you measure the effectiveness of beacons in a loyalty/rewards context?

We are far, far better off having a baseline experience that is 80 percent of the value for 20 percent of the information and effort.

Now in the future we will definitely add experiences that consumers can opt into by creating an account [with the promise of] getting value that’s commensurate with disclosing personal information — only so long as the consumer gets more than they give. That’s the only way this continues to be viable. The second someone crosses that threshold, now you’ve broken the trust with the consumer.

What do you think is the most challenging issue Adored faces in the rewards and loyalty space?

It’s definitely customer acquisitions. There is a density problem for beacons in particular; you need apps on phones, they’re looking for beacons, and you need beacons deployed in the world where the apps can engage. Luckily, you can go out and deploy 100,000 beacons. But if people don’t have apps on their phones that are engaging those beacons — not in a hidden, sneaky way, but in a true opted-in experience — what value have you actually delivered if you can’t do that?

Everything that we’re doing is solving that acquisition and retention problem. Our pitch to our investors is very simple: you can’t go too broad too quickly.You have to deliver value to the consumer and you have to deliver value to the locations that deploy the beacons and you have to do so very densely — otherwise 6-8 weeks later, those people are gone. The average retention for an app 30 days after install is very low. That was attached during a study from 2013-2014. 30 days after install for Adored over 60% of people still have the app actively engaged on their phone.